Remittances down 11 percent

Business Reporter
INWARD international remittances into Zimbabwe for the year 2017 amounted to $1,4 billion, an 11 percent decrease from $1,6 billion in 2016. Out of the $1,4 billion, Diaspora remittances amounted to $698,9 million.

“The bank is encouraged by the trend where authorised dealers are investing in enabling technologies that broaden financial inclusion, reduce remittances cost and increase remittance access points for the convenience of senders and recipients.

“These efforts towards formalisation of remittances are key in building sufficient capacity for leveraging on the developmental impact of remittances,” Reserve Bank of Zimbabwe Governor Dr John Mangudya said yesterday while presenting the 2017 Monetary Policy Statement.

Consistent with improvement in export generation, Dr Mangudya said international foreign currency receipts, on a cash basis, for the year under review amounted to $5,6 billion, compared to $5,5 billion received during the same period in 2016, representing a 1,4 percent increase.

While total foreign currency receipts increased and remain comparable relative to other countries in the region, the benefits of such receipts continue to be outweighed by the country’s huge import bill. In 2017, global foreign payments amounted to $4,81 billion, representing a six percent decline from $5,14 billion recorded the prior year.

Although there was a decline in foreign payments in 2017 relative to 2016, Dr Mangudya said payments for capital and intermediate goods increased, against a notable decline in payments for consumption or manufactured goods.

“This development points to efficient utilisation of foreign currency towards the productive sectors of the economy, in line with various Government strategies anchored on promoting domestic production.

“The Bank shall, therefore, continue to enhance the current compliance-monitoring framework to ensure continued allocation of foreign exchange in terms of the Foreign Exchange Priority List Guideline towards the productive sectors in order to increase exports whilst at the same time providing assurances to the earners of foreign exchange of the availability of their funds on demand,” he said.

Dr Mangudya added that the financial account balance continued to narrow down in 2017, on account of declining inflows of short and long term debt, subdued foreign direct and portfolio investment inflows. Net debt creating inflows declined from $1,01 billion in 2015 to $544,7 million in 2016 and $315,6 million in 2017.

Similarly, net foreign direct investment into the country is estimated to have declined from $343 million in 2016 to $235,4 million in 2017, while net portfolio investment inflows declined from $80 million to $41 million. He said Government is putting in place measures to promote both Foreign Direct Investment and portfolio investment.